MARK MARTINEZ: GOP is peddling budget myths
When it comes to our current budget mess, congressional Republicans seem hellbent on pushing myths that exist only in their world. And why not? In their world market, players are virtuous, the Bush years weren't so bad, and President Obama created trillion-dollar budget deficits.
If the GOP were serious about our current budget mess, they would stop peddling these and other myths that they've built up. They could start with these four.
Myth No. 1: The budget deficits are President Obama's. We hear it all the time. Obama is to blame for jacking up our budget. Nothing could be further from the truth.
According to the Congressional Budget Office, if it weren't for Bush-era policies -- unfunded tax cuts ($300 billion), unfunded wars ($300 billion), the insurance Medicare D giveaway ($70 billion), the losses associated with Bush's market collapse ($350 billion), the annual costs of the bailouts ($250 billion), and associate bailout guarantees and other transfers -- our budget deficits would be right about $100 billion, or less.
Let's repeat. Were it not for the Bush years, we would be running $100 billion deficits. The budget mess belongs to Bush.
Myth No. 2: "We need to cut taxes on the richest Americans so they can invest more." The key to this argument is believing that with more money in their hands, America's economic titans will invest in the economy. The rich, after all, know what they're doing. Subsequent wealth creation will "trickle down" in the form of new jobs and growth. New jobs will generate new income, which will cover tax revenue lost from tax cuts.
The reality is quite different. First, trillions have been "invested" in reckless derivatives. Second, over the past 10 years, corporate America has eliminated 2.9 million jobs in America, and added 2.4 million abroad. Finally, after 30 years of reckless tax cuts for the rich, our national debt has gone from just under $1 trillion in 1980 to $14.3 trillion today.
The Republicans' response to having their grand trickle-down theory blow up in our faces? They're proposing more tax cuts for corporate America and the rich (in spite of the fact that every dollar in tax cuts for America's richest class generates only 50 cents -- and perhaps as little at 10 cents -- in economic activity).
Myth No. 3: Entitlements are the problem. We're told, "We can fix the budget by cutting entitlements." The big scare here are Social Security and Medicare. Let's take a look at Social Security (Republicans want to gut Medicare, but I'll leave this topic for another day).
Simply put, Social Security has been generating surpluses for decades. It isn't the villain. In fact, we've borrowed so much from Social Security that we owe the program trillions of dollars. We don't need to cut Social Security benefits. We need to figure how we're going to pay it back.
On another level, entitlements aren't the only "expense" we can go after. Decades of lobbyist-driven favorable legislation for Wall Street, our biggest banks, big oil and other favorite sons of our economy have created more than $1 trillion in write-offs, deductions, write-downs, and other charge-offs that largely benefit corporations and America's upper middle class.
If the GOP were serious about the budget, we could find at least $200 billion in these corporate tax entitlements to help with the budget.
Myth No. 4: Funding government bureaucrats is a waste. We're told by the GOP that when state bureaucracies spend money it wastes money. So we need to cut budgets because they drain revenue.
What the GOP ignores is that for every dollar the IRS spends on audits, liens and seizing property from tax cheats, they bring in more than $10 in revenue. This is a 10-to-1 rate of return. If you're serious about fixing the deficit, increasing the IRS's budget is a pretty good investment. This is especially the case when you consider that more than $330 billion in uncollected federal taxes are sitting out there.
Yet, the Republicans want to cut $600 million out of the IRS budget by 2012, with more cuts later.
At the end of the day, the GOP would rather peddle myths about trickle-down economics, and blame President Obama for a budget disaster he inherited. The GOP hasn't been an honest broker in this debate. They aren't serious about fixing the budget (who presents a budget with no numbers?). They never have been.
Mark A. Martinez, Ph.D., is a professor in the political science department at Cal State Bakersfield.
